"Dropping the price this quickly is a sign that Palm is not getting the
uptake that it hoped for, and therefore sales aren't that great - which
is going to affect both companies, Palm and Sprint," Roger Kay, an
analyst with Endpoint Technologies, told eWEEK. "It doesn't say good
things about Palm's ability to position its products properly."

Palm may have anticipated Android's arrival, said Kay, "but they
couldn't have known the magnitude with which Google would step into
that gap. The broad positioning of Android kind of puts Google upwind
of Palm. And that's a bad thing for them."

"The third quarter of 2009 saw the announcement of many new mobile
devices, including several Android smartphones ready for the holiday
season in the fourth quarter, but hardware commoditization and the
growth in open platforms, will make it harder for them to stand out,"
Milanesi wrote.

Milanesi additionally pointed out that while smartphone and mobile
phone sales were up, stagnated selling prices, as well as gray-market
sales, made for a flat quarter, compared to a year earlier.

Kay offers the reminder that Apple abruptly lowered the price of its
first iPhone from $600 to $400 just three months after its June 2007
debut - and people were furious. In a rare concession, Steve Jobs
offered early adopters a $100 store credit.

Should Palm be offering refunds, or partial refunds?

"It certainly creates an image problem for them," Kay said. "They have to do something about that."